Who are we saving – poor farmers or poor consumers? Not both!

Both central and state Govt.’s have many food subsidy schemes. They are meant to protect poor consumers. Poor should not go hungry as food grains have become unaffordable for those having lower incomes. Govt. takes that burden to provide relief to the poor.

Farmers committing suicide continues this year too as the prices for the crops they had grown had dropped. Govt. pitches in, offers Minimum Support Prices for crops in attempt to save the farmers from killing themselves.

Does not look this odd? If food commodity prices were high, farmers would have been doing great. If food grains were cheap, poor consumers would have no issues with affordability.

Just take the case in Karnataka. Sugarcane farmers are committing suicides in a row. At the same time, the state Govt. provides rice at Rs.1/kg to protect the poor. 

Then who are the real beneficiary of Govt. subsidies? Somebody is making real money.

Prices of food commodities do not remain same throughout the year. Peak season to off-season rates see a huge volatility. During peak-season, when the supply is high, prices drop. Many farmers do not have holding power or access to storage facilities and reach to bigger markets. Middlemen provide liquidity to farmers but buy at a bargain price. Their ability to hold on till off-season ensures they get good price. Govt. made attempts to weaken the middlemen traders. But they did a poor job. Govt. bought directly from farmers and stored it in their warehouses which are not well maintained. Make a few checks, you will come to know that 20-30% food grains were rotten due to improper storage. That reduced supply during off-season, prices went up. That puts Govt. into action with subsidies again. Private enterprises do an efficient job in maintaining their food storage because of profit motive. For Govt., prime objective is not to make profits but to maintain a social balance. So Govt. owned food corporations are not efficient as private one. The best thing to do is to privatize these facilities. But Govt. will not fire its employees. So the inefficiency remains.

And the cycle continues. Govt. can’t let the farmers die or the poor suffer. Subsidies (which are taxpayer’s money) flow out into the hands of middlemen. They in turn fund all variety of political parties and corrupt Govt. machinery to keep their interests intact. The crony capitalism thus in operation does not let farmers and the labor class never get rich ensuring wages are always lower than capital costs. So I say in title of this post ‘We do not save either farmers or poor consumers’.

In my opinion the biggest reforms India needs are in Agriculture and Infra space. Robots (Make in India) and Computers (Digital India) would have waited. Making life easier should have been made a priority than doing business easy. No, I have nothing against the priorities of the ruling Govt. But our farmers and poor labor class should not extinct in our ambition of reaching Mars by mastering the rocket science or to become a global business magnet. All those ambitions are fine. But provide reliable supply of water and electricity first. Then our farmers and labor will buy smartphones and pay for the internet. That will increase the demand for manufactured goods and services and spurs the consumption cycle.

No matter what the Govt. does, this vicious cycle could be broken with personal and collective efforts too. We can help (or sponsor) the farmers we know to learn the new tricks of the trade – be it new seeds, low water utilization techniques or solar pumps and encourage them to build their own storage facilities. We can pool with neighbors to buy from farmers directly whenever possible. Similarly we can ask farmers to pool themselves and arrange delivery to consumers directly. It is not convenient in the beginning but once established it would work better. Help farmers earn better by avoiding big margins middlemen make wherever possible. However small the impact is, once it seems to work the idea will spread.

Instead of blaming rain gods or our political system for the inflation, we the consumers who can afford to go extra mile should do the same to reach the farmer and make it work better for both of us. Do not watch him die. Save the farmer to save ourselves.

ಬೆಟ್ಟದ ಮೇಲೊಂದು ಮನೆಯ ಮಾಡಿ

"ಬೆಟ್ಟದ ಮೇಲೊಂದು ಮನೆಯ ಮಾಡಿ
ಮೃಗಗಳಿಗೆ ಅಂಜಿದಡೆ ಎಂತಯ್ಯ "

ಇದು ನಾನು ಪ್ರಾಥಮಿಕ ಶಾಲೆಯಲ್ಲಿದ್ದಾಗ ನಮಗೆ ಬಾಯಿ ಪಾಠವಾಗಿದ್ದ ವಚನ. ಅಕ್ಕ ಮಹಾದೇವಿ ಮನುಷ್ಯನ ಸ್ವಭಾವವನ್ನು ಪ್ರಶ್ನಿಸುವ ರೀತಿ, ವಚನದಲ್ಲಿನ ಸರಳತೆ ಮತ್ತು ಜಾಣ್ಮೆ ನಮಗೆ ಅರ್ಥವಾಗುವ ವಯಸ್ಸು ಅದಾಗಿರಲಿಲ್ಲವೇನೋ. ಆದರೂ ಅದರ ಪದಗಳ ಜೋಡಣೆ, ರಾಗದಲ್ಲಿ ಹಾಡಿದಾಗ ಹೊಮ್ಮುವ ಭಾವ ಮತ್ತು ಕೇಳುಗರು ತಲೆ ತೂಗುವ ರೀತಿ ಕಂಡಾಗ ಅದು ಒಂದು ಮಹತ್ವದ ವಚನ ಎಂದೆನಿಸಿತ್ತು. ನಾವು ಶಾಲೆ ಮುಗಿಸುವವರೆಗೆ ಸಾಂಸ್ಕೃತಿಕ ಕಾರ್ಯಕ್ರಮಗಳಲ್ಲಿ ಕೇಳಿ ಬರುತ್ತಿದ್ದ ಈ ಹಾಡು ಇಂದು ಏಕೆ ಜನಪ್ರಿಯತೆ ಕಳೆದುಕೊಂಡಿದೆಯೇನೋ.

ನಾನು ಬೆಂಗಳೂರು ಮಹಾನಗರಿಗೆ ಜೀವನೋಪಾಯ ಕಂಡುಕೊಳ್ಳಲು ಬಂದು ಹಲವು ವರ್ಷಗಳೇ ಆದವು. ಇಲ್ಲಿ ಯಾರನ್ನಾದರೂ ಕುಶಲೋಪರಿಗೆ ಮಾತನಾಡಿಸಿದಾಗ, ಕೇಳಿ ಬರುವ ಸಾಮಾನ್ಯ ಮೂದಲಿಕೆ ಎಂದರೆ ಇಲ್ಲಿನ ಟ್ರಾಫಿಕ್ ಸಮಸ್ಯೆ. ಅರೇ, ಇದನ್ನೇ ಅಲ್ಲವೇ ಅಕ್ಕ ಮಹಾದೇವಿ ಕೇಳಿದ್ದು? ನೀವು ಟ್ರಾಫಿಕ್ ಗೆ ಅಂಜಿದಡೆ, ಬೆಂಗಳೂರಿನಲ್ಲಿ ಏಕೆ ಮನೆ ಮಾಡಿದ್ದು? ಅಂದರೆ ಅಕ್ಕನ ಕಾಲದಲ್ಲಿನ ಮನುಷ್ಯನಿಗೂ ಇಂದಿನವರಿಗೂ ಸ್ವಭಾವದಲ್ಲಿ ಯಾವುದೇ ವ್ಯತ್ಯಾಸವಿಲ್ಲ!

ಹನ್ನೊಂದನೇ ಶತಮಾನದಲ್ಲಿ ಅಕ್ಕ ರಚಿಸಿದ ಈ ವಚನ ಇಂದಿಗೂ ಪ್ರಸ್ತುತ ಎಂದರೆ ನಮ್ಮ ಉಡುಗೆ ತೊಡುಗೆ ಬದಲಾಗಿದೆಯೇ ಹೊರತು ನಮ್ಮ ವಿಚಾರ ಶೈಲಿಯಲ್ಲ. ಇದು ಬಹುಶ ಅಕ್ಕನಿಗೂ ಗೊತ್ತಿತ್ತು. ಆದರೂ ಸಮಾಜ ಸುಧಾರಣೆಯ ಪ್ರಯತ್ನವಾಗಿ ಈ ವಚನವನ್ನು ರಚಿಸಿದಳೋ ಅಥವಾ ಬದಲಾಗದ ಸಮಾಜದ ಧೋರಣೆಯನ್ನು ವ್ಯಂಗ್ಯವನ್ನಾಗಿಸಿ ನೀವಿರುವುದೇ ಹೀಗೆ ಎನ್ನುವ ಸಂದೇಶ ಆಕೆಯದಾಗಿತ್ತೋ ಇಂದು ಊಹಿಸುವುದು ಕಷ್ಟ.

ನಮಗೆ ಬೆಟ್ಟದ ಮೇಲಿನ ಏಕಾಂತ ಬೇಕು ಆದರೆ ಅದು ತಂದೊಡ್ಡುವ ಅಪಾಯಗಳು, ಅವು ಎಷ್ಟೇ ಸಹಜವಾದರೂ ಬೇಡ. ಸಂತೋಷ ಬೇಕು ಆದರೆ ಸಮಸ್ಯೆ ಬೇಡ. ಈ ತರಹದ ವಿಪರ್ಯಾಸಗಳಿಗೆ ಮನುಷ್ಯ ಯಾವ ಕಾಲದಲ್ಲೂ ಹೊರತಾಗಿಲ್ಲ. ಅವನಿಗೆ ಪ್ರತಿಯೊಂದರಲ್ಲಿ ಕೊರತೆ ಎದ್ದು ಕಾಣುತ್ತದೆ.ಸಂಪೂರ್ಣವಾಗಿ ಯಾವುದನ್ನು ಅವನು ಆನಂದಿಸಲಾರ. ಅವನು ಒಂದು ಸಮಸ್ಯೆಯಿಂದ ಇನ್ನೊಂದು ಸಮಸ್ಯೆಗೆ ಸಾಗುತ್ತ ಬಂದಿದ್ದಾನೆ. ಇದನ್ನೇ ನಾವು ನಾಗರಿಕತೆ ಎಂದು ಕರೆದರೂ ನಮ್ಮಲ್ಲಿನ ಮೂಲ ಸ್ವಭಾವದಲ್ಲಿ ಯಾವುದೇ ಬದಲಾವಣೆ ಆಗಿಲ್ಲ. ಈ ಬೇವು-ಬೆಲ್ಲವನ್ನು ಬೇರ್ಪಡಿಸುವ ಸತತ ಪ್ರಯತ್ನದಲ್ಲಿ ಮಾನವ ನಿರತನಾಗಿದ್ದಾನೆ. ಇದು ಎಲ್ಲ ಸಾಮಾನ್ಯ ಮನುಷ್ಯರ ಕಥೆಯಾದರೆ, ಅಕ್ಕನಂತವರಿಗೆ ಇದರಿಂದ ಹೊರ ಬರಲು ಸಾದ್ಯವಾಗಿತ್ತು. ಹಾಗಾಗಿ ಸಾಧಾರಣ ಮನುಷ್ಯನ ನಿಲುವನ್ನು ವಿಮರ್ಶಿಸಲು ಸಾಧ್ಯವಾಯಿತು. ಆಗ ಸೃಷ್ಟಿಯಾದದ್ದು ಈ ವಚನ. ಅದರ ಜನಪ್ರಿಯತೆಯೇ ಸಾರಿ ಹೇಳುತ್ತದೆ ಅದರ ಸಾರವನ್ನು ಯಾರೂ ಅಲ್ಲಗೆಳೆದಿಲ್ಲ ಎಂದು.

ಆದರೂ ನಮಗೇಕೆ ಮರೆವು? ಮನಸ್ಸು ಯಾವಾಗಲೂ ಹಿತವನ್ನೇ ಬಯಸುತ್ತದೆ. ಆದರೆ ಅದು ಸಂಪೂರ್ಣ ದೊರಕದಿದ್ದಾಗ ನಾವು ಗೊಣಗುತ್ತೇವೆ, ಇದೊಂದು ಸರಿಯಿದ್ದರೆ ಚೆನ್ನಾಗಿರುತ್ತಿತ್ತು ಎಂದು. ನೋವು ನಲಿವಿನಲ್ಲಿ ಸಮಾನತೆ ಕಾಣಲು ನಮಗೆ ಅಕ್ಕಳಿಗಿದ್ದ ಪ್ರಬುದ್ಧತೆ ಬೇಕಾಗಿಲ್ಲ. ಅವಳ ವಚನ ನೆನಪಿಸಿಕೊಂಡರೆ ಸಾಕು. ನಮ್ಮ ಮಾನಸಿಕ ಕಿರಿಕಿರಿ ತಗ್ಗುತ್ತದೆ.

ಮತ್ತೆ ಯಾರಾದರೂ ಜೊತೆ ಮಾತಾಡುವಾಗ, ಯಾವುದಾದರೂ ಸಮಸ್ಯೆ ಪ್ರಸ್ತಾಪಿಸುವ ಮುನ್ನ, ಒಮ್ಮೆ ಅಕ್ಕನ ಪ್ರಶ್ನೆ ನಿಮಗೆ ನೀವೇ ಕೇಳಿಕೊಳ್ಳಿ. ಈ ಸಮಸ್ಯೆಯನ್ನು ಸಂತೋಷದಿಂದ ಬೇರ್ಪಡಿಸಲು ಸಾಧ್ಯವೇ? ಅಷ್ಟಕ್ಕೇ ಸುಮ್ಮನಾಗಬೇಡಿ. ನಿಮ್ಮ ಮಗುವಿಗೂ ಅಕ್ಕನ ವಚನ ಕೇಳಿಸಿ. ಅದಕ್ಕೆ ಇಂದು ಅರ್ಥವಾಗದೆ ಹೋಗಬಹುದು. ಆದರೆ ಸರಿ ಸಮಯದಲ್ಲಿ ಅದರ ಪ್ರಯೋಜನವಾಗಬಹುದು.

Not Greece, it is Germany we should know better

With Greece in news, the world seems to be making efforts to understand the Greeks better. Why they are in trouble and what can be done and so on.

In a financial mess, it is not just the irresponsible borrower; the irresponsible lender also has equal contribution. In this case, the biggest lender to Greece is Germany. It was Germany’s tax payer’s money at risk. Though Germany is going to be the biggest loser now I suppose no one (apart from Germans) is sympathetic towards it. The reasons lie in the history too.

It was Germany at the heart of the two world wars. If there was no Stalin, Hitler’s ambitions would have become a reality. If we go two thousand years past into the history, Romans called them as Barbarians. It becomes apparent that they did not share any great relationship with their neighbors.

Today’s Germans are very efficient at their work. The machinery produced by them is world class. Their economy produces a surplus. But what do you do with that surplus money which goes on accumulating every year? It is lent to neighbors and foreign countries. 

One of the borrowers was Greece and when they were not able to repay their loans, Germany insisted Greece should cut its Govt. spending and implement tax reforms to run a budget surplus. Greece did to good extent; deploying austerity measures had put a greater pressure on its economy. Its unemployment went up. Its economy began to shrink. Its public felt they are not respected in the European Union and during the recent election they chose a leftist Govt. which opposed austerity. Its new leader has to confront Germany opposing to cut its Govt. spending. Even if Greece runs a budget surplus, it would take more than 30 years to settle debt. With a kind of social unrest, there is no patience left in Greeks to struggle for another three decades for the mistakes done in the past. They are angry with European Union (in which Germany is the biggest player) for asking for further budget cuts. So it reflected in the last week’s vote too. They want to leave the union.

What right Germany has in advocating how Greece should run its Govt.? If its is because Greece owes money to Germany, why Germany was not cautious while lending and let the debt balloon become bigger? That seems to be the question many are asking now. And here history comes alive again. Germany had led to physical destruction and loss of capital during world wars and now some think they are doing it economically with countries like Greece.

But the real problem lied in the formation of Euro currency. It is becoming clear now that without political integration, a common currency won’t work. All the countries in the European Union had their respective Govt.’s. Their policy approaches were different, so were the risk profiles. When they formed a union with a common central bank (ECB) and a common currency (Euro), the inefficient countries in the union would become losers. Since all of the union becomes one market with a common currency, those countries who produce quality goods at a competitive price would gain and those who cannot would see their domestic production reduce. To make up for that, local Govt. will have to step up public spending to keep the economy going. One country's exports are another country's imports. Germany’s surplus had to cause deficit somewhere else. Greece, Spain and Italy had suffered. That is the argument of few noted economists.

If and when Greece comes out of the union, it will pay its price with a weak currency, higher rates and inflation. And it would also set stage for other countries to leave the union too. And if the idea of Euro gets scrapped someday, Germany may not run the same surplus then. But this experiment is already affecting lives of many including those victims in Greece, all of them did not live at Govt.’s expense but everyone will pay the price of inflation and unemployment.

Two world wars ended after millions last their lives. This economic crisis too will end after leaving many homeless and jobless. It was US who became a superpower after the world wars ended. Germany fought hard in those world wars too but was not the victor. Now the fallout of Euro is making Dollar only stronger. Patience is a virtue. It always pays to mind your own business and avoid becoming over ambitious. Now Germany after losing its hard earned capital on Greece still does not get a good name in the pages of history.

Those who do not learn from history tend to repeat it, so goes a saying.

Philanthropy is ‘Earn More First’ and then 'Make a Diffrerece'

Look at these two news articles:

1.       Warren Buffett donates record $2.84 billion to Gates Foundation (Link: http://economictimes.indiatimes.com/articleshow/47964447.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst)

2.       Azim Premzi allocates additional 18% stake in company to fund philanthropy (Link: http://economictimes.indiatimes.com/articleshow/47965910.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst)

Warren Buffet is a wisdom house, Bill Gates a competitive businessman and Azim Premzi is an institution builder. They all were successful in their respective businesses.  They faced cut-throat competition. They did not tolerate inefficiency. If things did not work out as expected, they were quick to fire the people or close those products or business groups. All those decisive actions made them richest people on earth. But now it appears like they are at competition to give away the money. Though we are talking of three people here, the list is actually longer.

If they can quickly give away their wealth accumulated hard way, what did drive them? You would notice that they did not inherit this wealth; they had to struggle to get into billionaire’s list but now dropping out of that list do not give them bitter thoughts and they are doing it happily.

If money is a measure of their success and accumulating wealth is an indicator of one’s hard work, why they do not want to keep it? Why most of it is getting redistributed?

I think what drives them is, ‘Making a Difference’ in the world they live in. Earning money was a by-product though their focus was not to lose money in their businesses and they took all care to maximize returns on the investments they were making. They got things right in their professions and the money followed them. When they were running businesses, they focused on that. Now they are retired, they are well focused on philanthropy. Look at how they give away money. It is very data driven, focused on a cause with rigorous checks ensuring that money given away is actually used for the very purpose and it is a making a difference to the world. They made a difference when they were acquiring wealth and they are making a difference now when they are distributing it. Money is just a tool for them.

During their prime, they just did not make money for themselves. Their investors, customers, suppliers, employees benefited. Now they are putting money to work on the causes they believe in. They are building universities, fighting AIDS, finding vaccines for diseases, providing nutritious food, cleaning the water people drink and so on. All these will lead to leveling of the playground. It provides relief to vulnerable people, offer opportunities to disadvantageous communities. Social inequality gets reduced. And that may lead to birth of new age billionaires who would continue the trend.

Copper prices are down and the reason is China. India will gain but to lose somewhere else

Source:MarketWatch.com

China’s stock market came down faster than it went up. Central Bank’s actions and Govt.’s pledge to support are giving it a breathe but there are many indications that it may not come back quickly. Look at their neighbor Hang Seng index and Copper’s price for instance.

You don’t get to see 1,000 point fall on Hang Seng routinely. More than Greece, it is what is happening in China is affecting it. China’s markets lost $3.2 trillion in last three weeks. The volatility has taken out the nerves of investors. No matter what the Govt. or central banks does, they would not come back in a hurry. Look at the worst performers on Hang Seng index today. They are China domestic market related stocks.

Source: Investing.com

Another indicator is copper prices. China is the biggest consumer of copper followed by Europe. With the economic contraction in both the regions, demand for copper has comes down significantly. So it is reflected in the price. Copper is in bear market for the last 4 years with its prices sliding down continuously. And when it is down 40% (from highs of 2011), volumes traded show a long bar. Someone (or many) holding it as inventory anticipating higher prices lost patience and dumped it. But are the buyers know about ‘Greater Fool’ theory in order to avoid selling at lower prices? Probably yes, unlike stock markets or bond markets, gold or oil, copper is held mostly by who those who needs it (for industrial purposes) rather than for speculations. So if my hypothesis is right, prices may not see a steep fall from here as buyers (with large volume) are finding value at this price but it may not go up as dumping is likely to continue. This would surely affect copper mining countries like Chile, Peru, Australia and China itself. Their copper production will not see much growth and the investments in that sector may not have expected pay-off.

India’s share in copper production is very insignificant so it is a positive with its import costs coming down. Cheaper copper does its bit in cooling down inflation. Is it time to smile for Indians? For consumers, it is ‘Yes’ but for industries it is a ‘No’. Slowing down China will lead to dumping of many other commodities, not just copper but steel too, which would mean bad news for steel factories here. They will have to run factories at a lower utilization levels and keep away the expansion plans. That will hurt investments, new jobs creation etc.

Bursting of bubbles and prices coming back to realistic levels is a common thing across markets. And falling commodity prices would provide a much needed relief for Indian consumers from inflation and that would bring down the interest rates. That cycle has already started. And it would surely help long pending infra projects. But will that kick start new investments to drive growth? New industrial investments of big scale do not happen unless their existing production houses run at full utilization. But with the dumping of commodities, there would not be much rationale to for it. So Capital Goods, Mining and related industry will have to wait longer for their ‘Achhe Din’.